The New Stuff

Microsoft’s Fickleness Will Be Yahoo’s Downfall

Immediately after handing over its entire search business to Microsoft, Yahoo takes a beating on Wall Street. It’s not hard to see why. Instead of the upfront billions Microsoft offered last year, Yahoo is now getting revenue share on search ads.

Sure, it’s a huge revenue share — 88% for five years — but this is Microsoft we’re talking about. Search is only the latest among Redmond’s many fleeting non-software obsessions over the decades. If Ballmer gets tired of Bing within the next five years — which is extremely likely, given Microsoft’s track record — Bing would fall behind Google in search innovation.

Yahoo, being stuck with Bing for the next ten years, would be thoroughly YaScrewed. Carol Bartz just put Yahoo’s fate in very, very fickle hands.